Uber adds a booking fee to all taxi rides in Chicago

Velocity Wong, Chicago Tribune

- Mar 22, 2013 2:28 pm

Skift Take

It makes sense for Uber to try to make money as opposed to just trying to tick off the incumbents, but it’s consumers don’t really care about its cashflow problems, they just want their cars to show up on time.

— Jason Clampet

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Car service startup Uber, which allows consumers to request pick-ups on their smartphones, said Thursday it will start charging a $1.25 booking fee for taxi rides.

San Francisco-based Uber launched in Chicago in September 2011. It has two offerings, a higher-priced “black car” service and one that connects riders with taxis. The new booking fee affects just the taxi service and is designed to up the number of cab drivers that work with Uber and, in turn, increase the availability and reliability of the service, the startup said. The company is also wooing drivers by lowering its cut of fares, allowing them to keep more revenue. Taxi fares will continue to reflect the city’s meter rate, Uber said in an email to customers and a blog post on its website.

“The fee that drivers pay to Uber is now lower than other apps AND lower than the credit card fees their affiliations charge them,” Allen Penn, Uber’s general manager in Chicago, wrote in response to a critical comment on the blog post. “Our goal with this change is to increase the number of drivers that partner with Uber so you can get a ride through Uber when you want it more often.”

Uber also said this week that it is expanding its black car service to Chicago’s suburbs. The company did not specify a geographic range but said it is partnering with “dozens of dedicated suburban drivers” and expects pickup times in “most suburbs” to be between 10 and 20 minutes and drop as more drivers sign up.

The startup continues to face a lawsuit from the Chicago taxi industry, which contends that Uber’s black car service runs afoul of livery service regulations. Uber has hired as its lobbyist Chicago lawyer Michael Kasper, who successfully defended Mayor Rahm Emanuel against a residency challenge to his mayoral bid.